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More stick, less carrot for recalcitrant Poles?

Jo Harper
November 15, 2017

Negotiations for the first post-Brexit EU budget will start in 2018. Germany will be the biggest contributor to the budget. Will it use its leverage to make recalcitrant member states like Poland behave differently?

EU, Polish flags
Image: picture-alliance/NurPhoto/A. Widak

German Chancellor Angela Merkel said earlier this year that the Polish Law and Justice (PiS) government's dismissal of an EU inquiry into its judicial changes were "very worrying."

"However much I want to have very good relations with Poland . . . we cannot simply hold our tongues and not say anything for the sake of peace and quiet. This is a serious issue, because the requirements for cooperation within the EU are the principles of the rule of law," Merkel said.

Read more: Poland's judicial reform

And Germany has leverage as the biggest contributor to the EU budget.

A German position paper from earlier this year notes an "additional burden" in order to finance "new challenges" in areas such as migration and security. "Cuts will affect the future Multiannual Financial Framework [MMF] and its expenditures as a whole," the paper, which was adopted by Merkel's government on May 11, reads.

The cohesion funds are EU funding for poorer regions. Poland is allocated a total of €86 billion ($98 billion) from various EU cohesion funds in the current seven-year EU budget that runs until 2020.

A net recipient

Poland is the biggest net recipient of EU funds — in 2015 it got €13.4 billion from the EU. The EU budget will come under huge strain when the UK — one of the biggest net contributors — leaves.

In 2015, total EU spending in Poland was €13.358 billion, and a as a percentage of Polish gross national income (GNI) 3.25 percent. Poland's total contribution to the EU budget was €3.718 billion, while the Polish contribution to the EU budget was 0.90 percent of its GNI.

Warsaw has accused EU Commissioner Frans Timmermans of waging a "personal crusade" against the country.

The ruling PiS party has also taken aim at Germany, demanding war reparations, attacking plans to build a second Nordstream gas pipeline to Russia that bypasses Poland and being highly critical of its Western neighbor's policies towards refugees.

Read also: Nordstream II gas pipeline in deep water

"As long as Donald Tusk and his Civic Platform, PO, was in power, the idea behind the Polish membership in the EU was to catch up with the West," Jan Mus, a lecturer at Vistula University in Warsaw, told DW.

Polish workers
A lot of money from the EU cohesion funds has gone into helping Poland modernize its industrial baseImage: picture-alliance/dpa/J. Kaczmarczyk

"The West was the ultimate goal and at the same time served as a social, economic and political model. The dominant public discourse in Poland presented the country as benefiting immensely from European integration," he said.

"Law and Justice, PiS, won elections in 2015 because it referred to those who clearly saw things differently, bear the costs of the transformation process (including European integration) and who were ignored and forgotten by the PO elites," says Mus.

Last spring, the Polish weekly Wprost portrayed Chancellor Angela Merkel and EU Commission chief Jean-Claude Juncker on its cover in Nazi-style uniforms. In August, PiS leader Jaroslaw Kaczynski again demanded reparations from Berlin for WWII damages and one pro-PiS weekly suggested a sum of $6 trillion.

Poland's other rows with the EU include Warsaw's non-compliance with a European Court of Justice ban on logging in the World Heritage Bialowieza Forest and its refusal to accept 6,200 asylum seekers.

Read also: Can the EU save Poland's Bialowieza forest?

PiS is accused of having rolled back the independence of the Constitutional Tribunal and tried to do the same with the Supreme Court, stacked the state media, civil service and army with party loyalists, laid out plans to renationalize several major companies and implemented a radically conservative social agenda.

It managed this assault on the separation of powers despite half-hearted opposition from the president, Andrzej Duda. The European Commission and others called on PiS to rein in its attacks on democracy — to very little effect so far.

Confused signals from Poland

But Poland is also ready to increase its contribution to the EU budget and will oppose any politicization of EU funds, Jerzy Kwiecinski, the deputy minister of economic development, indicated in October. Asked if the Polish government would be ready to increase its contribution in the next multi-annual budget, the minister said: "If it's on the table, I think yes."

The Polish minister noted that many countries consider the cohesion policy as "the main investment policy" in the EU adding that "nobody questions it."

He noted that the convergence process is providing good results for Poland, whose GDP per capita is 70 percent of the EU average, against 50 percent when it joined the EU 13 years ago.

"We are not fond of introducing political requirements on investment policies," Kwiecinski said. "These policies are for the people and the economy, not for politicians."

Rising tensions

In February Polish Prime Minister Beata Szydlo accused the then French President Francoise Hollande of trying to blackmail her country. She said it was unacceptable for Hollande to threaten to halt EU funds because Poland was "not behaving properly."

Read also: PiS popular in Poland, isolated abroad

Poland tried and failed at the time to stop Tusk's re-election and refused to endorse the summit's joint statement. Szydlo said Poland would not accept a multi-speed Europe.

Bialowieza logging in Poland
Large-scale logging is taking place at the Bialowieza forest, and many policymakers in fellow EU nations are not amusedImage: picture-alliance/AA/O.Marques

She said the EU faced new divisions if stronger nations tried to integrate more among themselves at the expense of weaker ones like Poland and fellow ex-communist countries in the East.

There is new momentum behind the idea of EU members moving at different speeds. France, Germany and Italy back it, but Poland is adamantly against.

"A multi-speed EU will mean that the region will be even more divided than it is now," Cas Mudde, a professor at the University of Georgia, told DW.

"It is clear that countries like Hungary and Poland, as long as they remain under (radical) right rule, will not want to join the more integrated part, whereas the Baltic States are more keen to be in the core (in part because of concerns about Russia)."

French President Emmanuel Macron has reiterated his view this week that a multi-speed Europe led by a core of "avant-garde" countries could be the price worth paying for pushing the eurozone — and the European project more widely — forward in the aftermath of the Brexit vote.

Read more: Poland slams Macron's 'arrogant remarks'

"After Britain leaves, the EU will need to raise contributions or cut spending — both of which are difficult, Linda Yueh, adjunct professor at the London Business School, told DW. "That decision, though, would best be done after a review of the entire budget rather than target specific countries such as those in Eastern Europe. After all, cohesion will be more important than ever as Britain opens the door to leaving the bloc."

Critics argue that speeding up the process of monetary — as a precursor to fiscal — integration might fuel the overheating that was seen in Southern Europe after the 2007-8 financial crisis and subsequent recession.